Correlation Between Dimensional ETF and SPDR SSGA

Can any of the company-specific risk be diversified away by investing in both Dimensional ETF and SPDR SSGA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Dimensional ETF and SPDR SSGA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dimensional ETF Trust and SPDR SSGA Fixed, you can compare the effects of market volatilities on Dimensional ETF and SPDR SSGA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Dimensional ETF with a short position of SPDR SSGA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional ETF and SPDR SSGA.

Diversification Opportunities for Dimensional ETF and SPDR SSGA

0.91

Correlation Coefficient

Dimensional ETF  SPDR SSGA

Almost no diversification

The 3 months correlation between Dimensional and SPDR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional ETF Trust and SPDR SSGA Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSGA Fixed and Dimensional ETF is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Dimensional ETF Trust are associated (or correlated) with SPDR SSGA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSGA Fixed has no effect on the direction of Dimensional ETF i.e., Dimensional ETF and SPDR SSGA go up and down completely randomly.

Pair Corralation between Dimensional ETF and SPDR SSGA

Given the investment horizon of 90 days Dimensional ETF Trust is expected to generate 0.88 times more return on investment than SPDR SSGA. However, Dimensional ETF Trust is 1.13 times less risky than SPDR SSGA. It trades about 0.09 of its potential returns per unit of risk. SPDR SSGA Fixed is currently generating about 0.03 per unit of risk. If you would invest  4,132  in Dimensional ETF Trust on May 1, 2025 and sell it today you would earn a total of  71.00  from holding Dimensional ETF Trust or generate 1.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Dimensional ETF Trust  vs.  SPDR SSGA Fixed

Dimensional ETF Trust

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dimensional ETF Trust are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Dimensional ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SPDR SSGA Fixed

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SSGA Fixed are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, SPDR SSGA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Dimensional ETF and SPDR SSGA

The main advantage of trading using opposite Dimensional ETF and SPDR SSGA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional ETF position performs unexpectedly, SPDR SSGA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SPDR SSGA will offset losses from the drop in SPDR SSGA's long position.

The idea behind Dimensional ETF Trust and SPDR SSGA Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stocks Directory module to find actively traded stocks across global markets.